In 2025, the overall performance of China’s automotive aftermarket will be sluggish.
According to relevant reports, the annual cumulative output value and the number of units entering the factory both fell by 5% year-on-year.
However, when subdivided into the field of passenger car tires, the market presents a situation of ice and fire: the replacement market demand is weak and under pressure, while the supporting market is achieving structural growth driven by new energy vehicles.
In terms of the replacement market, the automotive aftermarket will overall decline in 2025, and the replacement tire market will not be immune.
Full-year replacement tire production fell 3% year-over-year.
Especially in the fourth quarter, the traditional domestic seasonal demand off-season continued, the end market support was insufficient, and the replacement volume continued to decline.
Stores whose main business is the sale of replacement tires have become the “hardest hit areas”, with the number of sales falling by 8% year-on-year, far exceeding that of quick repair and warranty stores (-3%).
This reflects that single tire sales stores have weaker risk resistance, while comprehensive service stores have stronger customer stickiness.
However, replacement tires, as one of the three major demand businesses, have shown strong resilience against risks. The annual output value decline was controlled within 5%, and the year-on-year decrease in the fourth quarter was only 2%. It is the most resistant business segment in the aftermarket.
The new energy vehicle after-sales market will usher in a full-scale explosion in 2025, and the number of core brands entering the factory will increase across the board.
The proportion of new energy vehicles entering the factory in the fourth quarter has approached 11%, which has significantly boosted the demand for new energy replacement tires.
Unlike the replacement market, the supporting market performed better in 2025.
Driven by the rapid growth of new energy vehicles, China’s passenger car production and sales have achieved optimistic growth, driving the annual cumulative growth of semi-steel tire matching volume to more than 9%, becoming the main driving force supporting the growth of the tire industry.
The growth of the supporting market is mainly due to the fact that China’s passenger car market is in a critical stage of transition from traditional fuel vehicles to new energy vehicles.
The production and sales of new energy vehicles remain at a high level, which has greatly boosted the demand for semi-steel tire accessories and supported the overall supply and demand growth trend.
However, the industry also faces many challenges.
According to industry research, China’s semi-steel tire production capacity will continue to maintain a steady upward trend in 2026, and the annual production capacity is expected to increase by about 9 million units.
As production capacity continues to grow, the current situation of overcapacity in the domestic market will further intensify.
Overcapacity will inevitably lead to fierce competition in the industry, and the market may experience “price-for-volume” situations, further compressing corporate profit margins.
As the penetration rate of new energy passenger vehicles continues to increase in 2026, the growth potential of the passenger vehicle market is expected to be insufficient, and the driving effect on semi-steel tires will become limited, which means that the rapid growth of the supporting market may not be sustainable.
Despite the challenges, the continued increase in the proportion of new energy vehicles has brought structural opportunities to the tire industry.
New energy vehicles have special requirements for tire performance, which provides opportunities for differentiated competition for tire companies with relevant technical capabilities.
China’s passenger tire market in 2025 will show structural differentiation amid the overall downward trend.
The replacement market is under overall pressure due to weak consumption and seasonal factors, but the rigid demand attributes and the after-sales explosion of new energy vehicles have provided certain support; the supporting market has achieved considerable growth by leveraging new energy vehicles, but the sustainability of future growth is questionable.
Facing overcapacity and market competition that may intensify in 2026, tire companies need to speed up product structure adjustments and develop special tire products suitable for new energy vehicles; optimize channel layout and enhance terminal service capabilities; control the pace of production capacity expansion to avoid vicious price competition; strengthen brand building and increase product added value.
Only companies that proactively adapt to market structural changes can win opportunities during the industry adjustment period and achieve sustainable development.
